According to news sources, the US Office of Comptroller of Currency (OCC), which is the relevant body for the issuance/grant of bank charters, has issued directions to the national banks and federal saving associations prevailing in the country to hold reserves for the issuers of stablecoins.
The clarification has been duly announced by the OCC that the issuers of stablecoins will now be entitled to hold reserve within the banks functioning within the country. It may be stated that in a self-explanatory letter issued by OCC it has been clarified that the reserve accounts either they are maintained with national banks or with federal saving associations can be funded by depositing stablecoins by the issuers/holders.
The announcement was in furtherance of the self-explanatory letter which was issued by OCC to re-confirm the policy that the stablecoin issuers as well as their customers can continue to hold reserve with their respective banks/federal saving associations subject to the condition that the coins are placed in hosted wallets.
Normally stablecoines are no different from an asset which is a digital asset and is supported by a fiat such as the US dollar. Some of the most popular stablecoins include such as USD Coin, Gemini Dollar, and Tether.
According to OCC’s letter, the national banks are eligible to provide authorized banking services relating to any permissible business which may also include activities relating to cryptocurrency until and unless the bank can undertake that it can manage the risks and that it will fully comply with the rules, regulations and policies issued by the regulator from time to time. If such an undertaking can be given by the banks/federal saving associations then they can continue to hold reserve for stablecoins issuers/holders.
Jeremy Allaire who is the Chief Executive Officer of Circle said that the interpretive letter issued by OCC is a positive approach which needs to be appreciated by all concerned which shows that the US and the industries working within it are moving in the right direction where everyone can contribute in an effort to build a more resilient and powerful standard for using digital dollars in the online world.
In the month of July, this issued a similar letter had also been issued by OCC in which it was clarified that the banks operating within the country can act as custodian of cryptocurrency.